Tucked behind rusted wrought-iron gates an hour west of downtown Tokyo, the Hachioji Medical Prison has the listless air of a forgotten nursing home. High concrete walls encircle its two wings, where the 260 patients, those too sick or unstable for Japanese prison cells, lie in six-bed wards behind barred windows. Between sips of green tea in his cramped upstairs office, the second-in-command, Yasuo Ueki, chatters on with pride about his aging facility, which has two operating rooms, an intensive-care unit, and now a CAT scanner too. Many of his patients are demented, crippled, or senile, and not one has ever escaped. “These patients are fragile and stay in bed,” he beams. “They would have to be very ambitious to climb the high wall and get out of here.”
Inside the brown tiled lobby, orderlies and guards in neon-blue uniforms scurry through a sliding barred door to attend to the patients beyond. Back there somewhere lies Hideki Yokoi, the 81-year-old Japanese billionaire who appears to be the true owner of the Empire State Building. One of the most reviled financiers of postwar Japan, Yokoi is finishing the first year of a three-year sentence on charges that he repeatedly ignored warnings to install and upgrade fire equipment at his famed Hotel New Japan—a cost-cutting move that proved disastrous one cold night in February 1982, when the hotel’s top two floors burst into flame, killing 33 guests, mostly foreign tourists, in Tokyo’s worst fire since the Second World War. The tragedy, and Yokoi’s very un-Japanese refusal to take responsibility for it, so dominates his image in Tokyo that few have focused on his less publicized activities, including rumors of dealings with Japanese organized crime, the yakuza. Even fewer remember the evening in 1958 when Yokoi narrowly survived a yakuza assassination attempt.
If you didn’t know an unsavory character like Yokoi had managed to buy one of America’s most famous landmarks, well, neither did its previous owner Prudential Insurance, which rejected Yokoi’s $40 million offer to buy it in 1991. Vanity Fair has uncovered evidence that suggests that, by operating secretly through an American shell company, Yokoi in effect stole the Empire State Building. But that’s just where this bizarre story begins. In a little-noticed lawsuit filed in Manhattan last fall, Yokoi is now suing his illegitimate daughter Kiiko and her French husband, Jean-Paul Renoir, charging they stole the Empire State Building from him, apparently by leaving his name off a set of ownership papers. And then, whether Kiiko and her husband had the legal authority or not, they handed over a sizable interest in the building to none other than Donald Trump.
Strange bedfellows they may be, but Trump and the battling Yokois stand at the center of a nasty four-way struggle now raging for control of the world’s most famous skyscraper. Even as they exchange blows with her father, Kiiko and Trump have declared war on no less a foe than Trump’s arch-enemy, Leona Helmsley, the legendary Queen of Mean, another recovering 80s figure just now retaking control of her family’s real-estate empire after release from a Connecticut federal prison. Why Leona? Because while Trump and the Yokois own the Empire State Building, the Helmsleys have a lease on the landmark building that runs through 2076, and what meager rent they pay to the owners dwindles further in the years to come. Unless Trump is able to break the Helmsleys’ lease, he and Kiiko stand to make less money than if they had put their money in a savings account.
In essence, Trump is acting as a high-class leg breaker, a task he has taken to with characteristic enthusiasm. Backed by battalions of lawyers, private detectives, and building inspectors, he first sued the Helmsleys in February, arguing that Leona’s partners had broken dozens of different conditions of their lease, including numerous safety rules. At the same time, Trump resorted to guerrilla tactics by providing support to a group of angry Empire State Building tenants, whose lunchtime protests of what they call substandard conditions in the building have grabbed considerable attention in the New York press. On one recent morning Helmsley security guards nearly came to blows with a local TV crew sent to cover a sidewalk demonstration.
“This building is falling apart,” complains Suzy Smith, a secretary on the 56th floor, who spearheads the tenants’ effort with the quiet assistance of Trump, who provided the printer she uses to crank out press releases. “We have rats everywhere, they’re roaming around. We have homeless people roaming our hallways. We opened the door one morning and there were two men urinating on the wall. There was this big puddle. We had a woman mugged in the building the other day—at nine A.M.! We could hear her screams!”
Donald trump describes the Empire State Building as a “dungeon,” and says the tenants are “living in hell.”
This, of course, is music to Trump’s ears. As he sits in his sun-splashed Fifth Avenue office one morning, there is no mistaking Trump’s zeal for the brewing battle with Leona, with whom he has wrangled off and on for two decades. “This building is the worst piece of shit you’ve ever seen in your life,” he says in mock horror. “It’s become an embarrassment to the city of New York.” And he’s just warming up. During our talks, Trump describes the Empire State Building variously as “a dungeon,” “Stalag 17,” and “a shithouse,” while observing that “the tenants down there are living in hell.”
Much of this, of course, is Trump’s patented brand of hyperbole. While age and the rigors of Manhattan have taken their toll, the Empire State Building is by no means falling apart. Built at the depth of the Depression to be the world’s tallest building — a distinction it held until 1970 — the grande dame of New York skyscrapers remains a powerful symbol of the city. The sleek gray facade with its graceful setbacks and missile-like tower soars 102 stories to 1,250 feet and still dominates midtown. Windows leak and maintenance crews aren’t setting any speed records, but legions of schoolchildren still throng the gleaming marble lobby most mornings on their way to the 86th-floor observation deck. Helmsley executives contest Trump’s allegations and flatly deny all stories of vermin and homeless people. To make sure the building survives the next eight decades, the Helmsleys have embarked on a $60 million renovation project, which has been under way since 1990.
Still, the Helmsleys aren’t taking Trump lightly. Leona, who has no day-to-day responsibilities at the building, and her husband, Harry, who’s believed to be suffering from Alzheimer’s disease, are leaving the fight to their longtime partner Peter Malkin, an erudite 61-year-old Harvard man whose knotty-pine office on 42nd Street affords a stunning view of the Empire State Building, eight blocks south. Malkin has brought in high-powered attorney Arthur Liman to take aim at what both sides know is Trump’s Achilles’ heel, his partnership with the bickering Yokoi family. “Our position is that he doesn’t own [the building], because the people who sold it to him stole it,” Malkin snaps. “He’s dealing in stolen property.”
Sensing its vulnerability, Trump’s camp is doing everything it can to straighten out the Yokois — but so far with little luck. “To have the Empire State Building in the hands of warring Japanese families is absurd,” fumes Richard Fischbein, Trump’s lead attorney. “What they have inadvertently done is put themselves into a position of fighting over the most recognizable landmark of New York City. You can’t do that to the Empire State Building, to New York. And when you mix in Trump, and you mix in Helmsley, they’re playing in a game they don’t even understand.”
The Yokois aren’t the only ones in the dark. No one involved in the New York end of the case, from Trump on down, seems to have the first clue what the Japanese family is fighting about. “Nobody’s really been able to explain to me what’s going on,” admits Trump. “I was surprised [by Yokoi’s lawsuit], because I’d seen how close the father and daughter were. But I knew the father was in prison, and I know funny things can happen, mentally, when you’re put in the can.” Even Henry Bubel, the New York lawyer representing Yokoi’s daughter Kiiko, is at a loss to explain the case. He says the elderly Yokoi is in fact a beneficiary of the family trust that owns the skyscraper, and says the lawsuit is a “terrible misunderstanding,” apparently not the first inside Yokoi’s colorful family, which at last count includes 19 children, at least 11 of whom are illegitimate.
“If these people were Americans,” sighs Bubel, “Judith Krantz would be writing a novel about them.”
Every time a prime piece of American real estate gets snatched up by a Tokyo-based firm, it is always the same. In newspapers, on talk shows, at cocktail parties, it’s “the Japanese” who bought it. “The Japanese” bought Rockefeller Center. “The Japanese” bought Pebble Beach. “The Japanese” bought the Columbia and MCA/ Universal movie studios. Well, “the Japanese” didn’t buy the Empire State Building. Hideki Yokoi and his oddball family did.
To fathom Yokoi’s notoriety in Japan, just visit the building that serves as his unsightly legacy. The once elegant Hotel New Japan, a jewel of Tokyo’s reconstruction efforts after the Second World War, now sprawls eerily abandoned on one of downtown’s busiest streets. Untouched since the night its top two floors burned 13 years ago, the building still bears scorch marks on its grimy white brick façade; windows on the upper floors remain covered by worn brown boards. A tattered, sepia-toned canopy, flanked by piles of wreckage and shattered windows, hangs behind barbed wire in the parking lot below. My guide shudders at the memories the old hotel conjurs. “It was all televised,” she murmurs. “We could see people falling, and calling for help, and we couldn’t do anything.”
Yokoi bought the hotel from a former Japanese foreign minister in 1979, in what the Tokyo press interpreted as a last-gasp attempt at respectability. But the fire, followed by Yokoi’s conviction on negligence charges—not to mention the hardball tactics he used to forge settlements with survivors — enshrined him as one of the country’s true villains. YOKOI: A MAN HATED FOR EIGHTY YEARS, blared one headline.
“He is not the kind of guy we know how to deal with in Japanese business,” says Yasuo Hariki, a Tokyo business editor who has known Yokoi for nearly 40 years. “He’s very anti-traditional. You know, there’s never been a company president sent to jail before this. His family, everyone, believed he would get probation. But because of his bad reputation, the judges went very tough on him.”
“To have the Empire State Building in the hands of warring Japanese families is absurd,” fumes Trump’s attorney. In person there’s little demonic about Yokoi. A small man, about five feet five inches, with black hair slicked back and parted down the middle, he is a natty dresser known for his trademark bow ties — clip-ons, says Hariki. Yet even before the fire, Yokoi was everything the Japanese hate: a wolverine-like renegade with no regard for custom, a bully who profits from intimidation, a tax cheat (fined in 1986 and 1987), a philanderer (four known mistresses and counting), and a debtor who always seemed to be at war with his lenders. Worse, he was flamboyant, tooling around in big, chauffeur-driven Cadillacs and, it’s said, planning for his eventual demise by building an immense mausoleum complete with chandeliers.
“He is a terrible man, not just in business, but as a person he is irresponsible,” says Kozo Ikeda, editor of the leading Tokyo business magazine, Zaikai.
Much of the outrage Yokoi inspires arises from the Japanese loathing of financial speculation. In a country where hostile takeovers are all but unknown, Yokoi may have been Japan’s first postwar greenmailer, silently amassing stakes in a series of companies before striking deals for his shares. (That was how he bought the Hotel New Japan.) In New York, greenmail is frowned upon. In tradition-bound Tokyo, it is virtually criminal — though greenmail and even more sinister practices flourish in secret. Such top brokerages as Nomura and Nikko Securities have been embroiled in scandals for dealings with yakuza groups, and there’s a long history of companies’ paying protection money to syndicates and hiring yakuza bodyguards. An entire class of small-time gangster “strong arms,” the sokaiya, specializes in disrupting annual meetings — unless, of course, they are paid off.
Financial speculation of all kinds, in fact, has come to be associated with yakuza groups, who operate far more brazenly than their American Mafia counterparts. Until recently many yakuza groups met in clearly marked headquarters. After recent crackdowns many have begun recasting themselves as corporations; the third-largest group, the Inagawakai, for instance, has become Inagawa Industries.
During Japan’s wild 1980s “bubble economy,” yakuza groups piled into real estate and the stock market and muscled companies into all sorts of questionable deals. “The Japanese financial world is just so dirty,” says an American financial reporter in Tokyo. “It’s a twilight world. There’s just so much shady dealing. Greenmail is just another kind of blackmail. There’s so much pressure applied. They hire gangsters to walk around the hallways of businesses, embarrassing people or slowing down the work. I can’t say Yokoi has done any of this, but the crowd he runs with certainly has.”
Yokoi has been an outsider since he arrived in Tokyo in 1930, a 15-year-old street vendor fleeing the poverty of a provincial village and, it’s said, an alcoholic father. His first venture was hawking underwear with his friend Mitsuo Hishida by bicycle to retailers. “We used to pack such heavy bags of underpants that the bicycles lost balance and we fell over,” laughs the 74-year-old Hishida, who has served as Yokoi’s right-hand man since 1937.
A distinguished-looking executive whose pink cheeks and forehead are mottled with liver spots, Hishida agreed to a rare interview at his attorney’s office in an immaculate conference room high above downtown Tokyo. “He had a younger brother with polio and two sisters, so Yokoi-san was the one who supported the whole family — it was what drove him,” says Hishida. They couldn’t afford a flat with running water, so at night the two friends retreated to public baths, where they washed each other’s backs and dreamed of future riches.
Twice in the 1930s, Yokoi was called to army service in China, returning home with awards for marksmanship. In 1942, in the wake of Pearl Harbor, Hishida followed, only to languish in a Soviet P.O.W. camp in Siberia for eight years. Returning in 1949, he found Yokoi thriving, the owner of a six-story building in the Nihonbashi section of Tokyo crammed with 200 workers turning out draperies and carpeting for the homes of American servicemen. In later years stories spread that Yokoi had made a small fortune bilking the U.S. military via fake billings. Whatever the truth, he did well enough to buy a second building, in the fashionable Ginza shopping district, where he soon opened a “dollar-only” department store targeted at cash-rich G.I.’s.
“We used to show up at five in the morning [to open the store], and there would be a thousand people out waiting,” remembers Hishida. “You could use only American dollars, so the Japanese went and got dollars on the black market and came here to do shopping.”
At first, Yokoi took his mushrooming profits and snapped up choice bits of real estate around Tokyo. Then, in 1952, in an epic fight still remembered in Japanese business circles, he launched his first takeover raid, against Tokyo’s huge Shirokiya department store, which Yokoi felt was poorly managed. After a grueling, three-year slugfest he lost, but his terrier-like intensity caught the eye of Keita Goto, the powerful chairman of the Tokyu department-store chain. In the ensuing years Yokoi attacked a series of Japanese companies, including several of Tokyu’s competitors — battles Hishida now acknowledges were secretly funded by Goto, who didn’t dare engage in such nontraditional behavior himself.
Loathed by many, respected by others, Yokoi was considered one of Japan’s most daring young investors when, one night in June 1958, a gunman suddenly burst into his Ginza office and began shooting. Hishida was sitting beside Yokoi when it happened. A third man, a visitor, dived under Yokoi’s desk. One bullet struck Yokoi in the left arm and ricocheted into his chest. Badly wounded, Yokoi lurched from his chair, chased the thug to the elevator, and then collapsed in a pool of blood. Hishida raced after him, telephoned the hospital, and rode with him in the ambulance.
“I have never spoken of this before to anyone, not even my lawyer,” says Hishida, grinning nervously. “The doctor said he couldn’t guarantee his life. They cut him open from his throat down to his navel, and across his chest, too. And they couldn’t find the bullet. They couldn’t find it! So they just stitched [him] back up. And later the X-ray showed the bullet is half hidden in his left lung. Even today the bullet is still there. Nobody knows that. Even his own children don’t know that.”
The shooting grabbed national headlines, the more so when a yakuza gangster was arrested and convicted of ordering it. Noboru Ando, head of the Ando-gumi crime group, told his story to a Tokyo magazine two decades later. According to Ando, he had once worked for Yokoi, presumably as a bodyguard, during the Shirokiya fight. When Yokoi welshed on a loan from a Japanese duke, the man’s family hired Ando to get its money back. In Ando’s telling, Yokoi not only refused to repay the money but also insulted him, calling him a “punk yakuza.” Outraged, Ando says, he sent one of his thugs back to Yokoi’s office to avenge his name.
Yokoi never publicly spoke of the incident. But another explanation soon made the rounds. “[Yokoi] went into business collecting money with some yakuza,” claims Yasuo Hariki. “Knowing Yokoi’s style, I assume the yakuza was getting a very small share. That’s why he was shot.” (In an odd postscript, Ando went on to become a minor celebrity following his release from prison, starring in a series of B movies based on his yakuza exploits.)
It was by no means the last time Yokoi’s name was mentioned in the same breath as the yakuza’s. As recently as 1991, the year he secretly took control of the Empire State Building, a Tokyo magazine named him as a probable conduit for information between Nomura Securities and the Inagawakai. “He has not been regarded as yakuza, not a criminal, but he’s been known to do deals with the yakuza, with yakuza financing,” says Henry Bubel.
“Yokoi’s way of doing business is very unsophisticated — he is very rough, very tough,” explains Hariki. “His opponents depend on yakuza, of course, so he tries to get stronger, more powerful yakuza. He goes right to the top.”
For all the talk, however, no concrete links between Yokoi and yakuza gangsters have been proved. Hishida brushes aside the stories with a smile. “Sure, it’s been rumored widely, but I strongly deny it,” he says. “Once we get some kind of tie with those kind of people, it’s almost impossible to cut it. So Yokoi would have nothing to do with them. Those people never came into the office.”
During the 1960s and 1970s, Yokoi branched out into all manner of businesses — sugar, shipping, bowling alleys, and nightclubs — while mounting regular takeover raids. But it was his private life that hogged the headlines. He was reported to have fathered children by a number of actresses and models, including a Miss Yokohama, who gave him a baby boy in 1968; a cabaret dancer, who gave him a baby daughter in 1952; and another beauty queen, with whom he had a baby girl in the mid-1970s. A number of these women, it’s said, hold sway at Yokoi’s offices near the Imperial Palace, in what one Japanese reporter describes as “a very firmly established hierarchy, like an old-style harem.” Into his 70s, Yokoi was said to be living with a 25-year-old actress and exerting considerable effort to get their baby daughter into a prestigious kindergarten.
Deconstructing the Yokoi family is a dicey business. According to a family attorney, there are 19 known children, who fall into four categories. Two sons are “of the marriage,” born to Yokoi’s wife, Michiko, who is said to be alive but on a respirator. The elder son, Kunihiko, is known in gossip columns for an 80-day marriage to a Japanese actress and a collection of 17 foreign cars. Two other children are adopted and assumed to be the offspring of Yokoi mistresses. Four others, including Kiiko, are illegitimate but recognized by Yokoi as his own. Another 11, or maybe more, are illegitimate and unrecognized. “None of these children were raised together,” says the attorney. Of the recognized children, “seven of eight are from different mothers, maybe eight of eight.”
Some Japanese bought golf courses. Some bought shopping malls. Yokoi and Kiiko bought castles in Europe. The mistresses, the flashy cars, the nightclubs, the shadowy financial dealings — all contributed to a reputation Yokoi has tried to shed in vain. “Yokoi-san certainly wanted to be accepted at the top of the Japanese business world, [but] when he bought Hotel New Japan, the Japanese business community was very opposed, because the owners of prestigious hotels should be prestigious people,” explains Kozo Ikeda. “The acquisition of Hotel New Japan was really the turning point in Yokoi’s career — if he could succeed in managing Hotel New Japan, he could turn around his reputation. But because of his nature — he’s so greedy — he lost the opportunity. All that remained were his bad footprints in the shady business world.”
The fire, started by a British tourist smoking in bed, ended whatever hopes Yokoi had of escaping his past. After he was indicted and convicted at trial — and released on bail pending appeal — the charred building simply sat empty. According to Kazuomi Yamaguchi, a writer with the Shukan Asahi Weekly magazine, repairs were prevented in part by a maze of competing claims of ownership, including those of several purported yakuza gangsters who had purchased rooms in the hotel as condominiums.
In the wake of the fire, a new face appeared at Yokoi’s offices. Her name was Kiiko Nakahara, and she was one of Yokoi’s daughters, but one so obscure that even Hishida didn’t know her. “I knew about most of the children, but not Kiiko,” he says. “Until the fire, I had never even heard her name.” Kiiko, then in her mid-30s, was a little-known designer with a boutique in Tokyo’s hip Roppongi section. Quiet and full-figured, she specialized in designing uniforms; among her contracts, friends say, was one for United Airlines’ flight attendants’ outfits. Kiiko, whose mother was one of Yokoi’s earliest mistresses, had fallen out with her father at some point and still harbored some bitterness over their estrangement. “He didn’t do anything for me when I was little,” she sniped in brief comments to a Tokyo newspaper in 1985. “I couldn’t even pay for my lunch fee at school. I could hate him. How could I have sympathy for him?”
Money heals all wounds, they say, and by the mid-1980s Yokoi was swimming in yen. In a supreme irony, the Hotel New Japan had been transformed into one of the most valuable pieces of real estate in the world. By standing empty it had become that unbelievably rare commodity — an undeveloped lot in Tokyo. In 1987, near the height of the bubble economy, the lot was valued at an astounding $1.8 billion, making Yokoi worth as much as $2 billion, enough for Forbes to list him among the world’s richest men. When other Japanese magnates began using their newfound fortunes to snap up choice properties all over the world, Yokoi— perhaps with mounting legal claims from the fire in mind—joined t he rush to move money overseas.
Some Japanese bought golf courses. Some bought shopping malls. Yokoi bought castles. According to Hishida, it was Kiiko’s idea. Because she spoke English and had traveled overseas, Kiiko became her father’s scout, touring and photographing the finest estates and castles of Western Europe, then returning to Tokyo to allow her father to select his favorites. Those Kiiko didn’t find, Yokoi ordered from real-estate catalogues, sight unseen. At the height of their buying spree, father and daughter had acquired 15 deluxe properties, mostly castles, all in France except for three outside London, and one each in Scotland and Spain. One was Thames Park in Oxfordshire, where parts of The Madness of King George were filmed. Another, Glenapp Castle, built in 1870, has been called one of Scotland’s greatest treasures. Although Kiiko took Juniper Hill, in Oxfordshire, for herself, Yokoi had little use for any of the estates; in fact, he never visited a single one. By most accounts, he has never set foot in Europe.
Financial details were sometimes handled by Kiiko’s husband, Jean-Paul Renoir, the chairman of Lehman Brothers Asset Management in Tokyo until his resignation in 1992. Renoir is an urbane international banker with degrees from Johns Hopkins and New York Universities, who, friends say, met Kiiko in the early 1980s in London, where he worked with Middle Eastern clients for American Express Bank. Former colleagues remember Renoir as quiet, forceful, and fit, an exercise fanatic who jogged the desert hills of Oman while co-workers huddled in front of air conditioners. “He was built out of steel,” says one. “He lived on a diet of grapes and cheese and exercise.”
After Renoir transferred to Tokyo, he and Kiiko married and moved into a small but elegant apartment in Roppongi, where Kiiko’s own paintings lined the walls. “They were not flamboyant, flashy people, not at all the types to turn up in pink Cadillacs and Rolls-Royces,” says a friend. “Kiiko was quite traditional in some ways. I remember having dinner with them one night — Kiiko cooked fabulous Japanese food — and we had the [toughest] job persuading her to sit at the table and eat it with us. She was a very interesting blend of modern and traditional Japanese woman.”
For years Yokoi’s castles lay unoccupied and, it’s alleged, unmaintained. Kiiko and Renoir took to calling them “ghost houses.” In time local officials near several of the estates began to grumble about decaying conditions, including unmowed lawns, unpaid groundskeepers, and leaky roofs. In the early 1990s, their concerns grew into alarm when Yokoi began showing signs of financial strain as the value of his real estate plummeted following the collapse of the Japanese economy. At Glenapp Castle, rainwater poured into the dining room, which caused floorboards to rot and saturated antique rugs. There was no money for heating oil, electricity, or general maintenance. By 1992 a Scottish member of Parliament had been forced to take up the castle’s cause, writing the Japanese ambassador in an effort to save it. Reached by a Scottish paper, Renoir said he’d had no idea the castle was in need of repairs.
Far worse is the situation in France, where Renoir has been indicted on charges that he tried to loot some of the Yokoi estates of their antique furniture, paintings, objets d’art, and tapestries — all considered historic objects strictly protected under French law. At several of the properties, including the Chateau de Sully in Rosny-sur-Seine, Ministry of Culture officials have intervened to force maintenance and prevent the moving or selling of protected objects. In 1992 the mayor of Rosny-sur-Seine succeeded in having an official complaint filed against Renoir and an English antiques expert, charging them with “destroying, mutilating, and defacing” a historic building after a garden temple was dismantled and moved and other items were put up for auction. French authorities, who at one point issued a warrant for Renoir’s arrest, were hindered in their investigation until discovering that Renoir was not his real name; it was Perez. (Henry Bubel says the accusations against Renoir don’t constitute a criminal indictment, but rather an investigation.) Renoir has hired Jacques Verges, the radical Paris lawyer whose clients include the terrorist Carlos the Jackal, to defend him. All Yokoi’s European properties are now said to be for sale, and the Scotland castle was sold last year.
It was against this backdrop in 1991, as rumors flew about his financial condition and Japanese creditors clamored to be paid, that Yokoi read an intriguing item in a Tokyo newspaper. The Empire State Building had just been put up for sale. It was a building, Yokoi told Hishida excitedly, that he had always yearned to have.
On May 1, 1931, President Herbert Hoover pressed a button in the Oval Office and the first lights flashed on in grand marble lobby of the Empire State Building, newly erected on the site of the old Waldorf-Astoria at the comer of Fifth Avenue and 34th Street. The story of its construction is dominated by those “bigger, better, faster” records that Americans loved to tally: 60,000 tons of steel, enough to lay a railroad from New York to Miami; 15 million feet of phone cable; 200,000 cubic feet of Indiana limestone; 1,000 miles of steel wire for the elevators; 6,500 windows; 10 million bricks. During the Depression the building remained largely vacant—giving rise to the nickname the “Empty State Building” — but later, as New York City real estate boomed, it became, both aesthetically and financially, the prototype for the successful skyscraper.
In 1961, Harry Helmsley and his partners negotiated a 114-year lease with the building’s owner, Prudential Insurance, that featured rent payments that declined sharply over time. This meant that when Prudential went to sell the building in 1991 the Helmsleys’ lease was paying a return of barely 5 percent. As Greg White, leader of the Salomon Brothers investment-banking team hired to run the auction, told Prudential executives, it looked like a hard sell. They might get strong bids based on the building’s name recognition, or they might get very low bids based on the poor rental income.
“What we were selling was as much smoke as cash flow,” says a member of White’s team. “Clearly part of [buying the building] was an ego play. I remember one offshore investor wanted to use it on the masthead of everything he did around the globe as an identity factor. . . . [Another] guy was going to auction ‘literary work’ for over $100 million to buy it. You weren’t quite sure whether he was in a mental institute or for real. This was the kind of famous building that elicited anything and everything.”
And so White’s people weren’t surprised when a Frenchman named Jean-Paul Renoir, representing a wealthy Japanese family that wished to remain anonymous, called to arrange a meeting. Renoir arrived in White’s offices with Kiiko, who mostly remained silent, and a portfolio brimming with photos of European castles. “They came in and talked about a strategy to buy all these castles around the globe,” says the member of White’s team. “The Empire State Building was just one more in a line of castles. It sounds extraordinarily odd, but in the context of this building, nothing was going to surprise us.”
When final bids arrived in the summer of 1991, Renoir topped the list, offering $40 million. Strangely, one team member recalls, Renoir resisted disclosing the family’s identity until moments before signing the purchase agreement, which was final pending Prudential’s approval and a background check on Renoir and his investors. The background check was considered crucial to Prudential’s image-conscious executives. “Prudential was very sensitive,” says the team member, “and didn’t want to be selling to an entity it wouldn’t otherwise be doing business with.”
The case carries risk for Trump — the Helmsleys will argue he is doing business with a purported crime ﬁgure.
The name Hideki Yokoi meant nothing to White’s people. They directed their first questions to an executive in Salomon’s Tokyo real-estate operation, Norio Mutai, who had dealt with Yokoi during the bidding and who had a large commission riding on the deal. But even before Salomon Tokyo could respond, White and his colleagues found news articles about the Hotel New Japan fire in a Nexis search. Worried, White alerted Prudential, then angrily telephoned Mutai in Tokyo.
“We said, ‘How come we never heard this before? What’s the story?’ ” remembers a Salomon executive in New York. “A day or two later they came clean. They admitted his reputation was hardly consistent with the parameters the Pru wanted. We had to have someone who would pass the smell test, and he clearly didn’t. There was never anything discovered that was factual. It was just innuendo, hearsay, comments. There were just a lot of question marks. And it was clear we would get no answers.”
The one word that froze on everyone’s lips was “yakuza.” Nearing panic, White broke the news to Kurt Reich, the senior Prudential executive involved in the sale, who swiftly killed the deal. Recriminations broke out everywhere. Prudential wanted to fire Salomon. Deeply embarrassed, White wanted to strangle his colleagues in Tokyo. Renoir alone remained calm, seemingly taking news of the canceled deal in stride. His suggestion that Kiiko buy the building instead of her father was politely rebuffed. The Salomon team was left to collapse in relief, believing they had narrowly avoided the ignominy of selling a major American landmark to someone who may or may not have been a Japanese gangster.
Assuring Prudential executives they could quickly find a new buyer, White’s team raced to contact the runners-up, at the same time throwing out new overtures to anyone who might conceivably bid. They were joined by Richard Sachs, a member of the Salomon department that catered to wealthy individuals. Sachs knew his clients loved to be offered expensive baubles like the Empire State Building, if only for the privilege of bragging during cocktail chatter that they had “passed” on it. Now and then one of his group’s calls led to something big, as when Salomon sold the Dallas Cowboys to Arkansas oilman Jerry Jones.
This time Sachs appeared to get lucky. He contacted the auction team with a new name, Oliver Grace Jr., a Wall Street investor who seemed interested. The 38-year-old Grace and his brother, John, had made names for themselves during a series of takeover raids on undervalued mutual funds in the late 1980s. Sometimes partnered with Thomas B. Pickens III, son of famed raider T. Boone Pickens, the Graces swooped down on their wounded prey, bought up bushels of stock, then made millions either by forcing restructurings or by selling out during the stock’s inevitable rise. Business Week dubbed them “the Brat Pack of the corporate world.” The British press preferred the term “bloodsuckers.”
Despite his sometimes brutal tactics, Oliver Grace’s blue-blooded pedigree impressed the Salomon team. A second cousin of industrialist Peter Grace and a great-grandson of William R. Grace, a onetime mayor of New York, Grace sat atop a war chest of $200 million raised from wealthy relatives and chums from Manhattan’s Buckley School, and Georgetown and Vanderbilt Universities. Oliver Grace Sr. was a well-known Wall Street banker who had made his fortune buying cut-rate Japanese bonds after the Second World War.
“Believe me, we did quite a bit of checking on Grace, and he checked out,” says the Salomon team member. “Smart, tough, and clean. We called family, relatives. After the last time, the one thing we were not going to do was leave some stone unturned. Everybody who ever knew him was phoned.”
Approved by Salomon, Oliver Grace closed his purchase of the Empire State Building on November 27, 1991, amid unusually intense secrecy. Everyone involved in the sale, including executives at Prudential and Salomon, signed pledges not to disclose Grace’s name. Even Peter Malkin’s managers at the building itself weren’t told who their new landlord was. The Wall Street Journal got wind of the sale and ran an article, but it too couldn’t learn the mystery buyer’s identity. Not until two months later did the Journal report that the buyer appeared to be Grace, who tersely fibbed to the paper, “I know nothing about that. … I don’t want to comment.”
Why all the secrecy?
Maybe because Grace didn’t want to explain a wire transfer his holding company had received November 20, exactly one week before his closing. The transfer, drawn on an account at Osaka Bank, was for $29.5 million, and it came from Nippon Sangyo, a company controlled by Hideki Yokoi.
I stumbled upon this payment while perusing hundreds of checks and wire transfers listed as exhibits in Yokoi’s lawsuit against the Renoirs, and wondered: Did Grace act as a front for Yokoi as a way to get around Prudential? Grace’s attorneys won’t discuss any contacts with Yokoi. But, surprisingly, Donald Trump will.
“Grace was a vehicle for them,” Trump confirms. “He bought it for them because they couldn’t. That’s the guy’s 14 seconds of fame, 15 minutes, whatever.” Yokoi’s American lawyer, Steven Rosen, discovered the secret payment only after agreeing to represent Yokoi. “I think Renoir knew Grace and got him to do it,” Rosen speculates. “They made an arrangement with Grace.”
So it seems. None of the Prudential or Salomon executives involved in the deal will discuss it on the record. Rick Matthews, public-relations director at Prudential headquarters in Newark, New Jersey, says only, “When we did the deal with Mr. Grace, we had every reason to believe he was investing for his own portfolio.” But privately a number of those involved said they were stunned to learn of Yokoi’s payment to Grace. “That’s remarkable — are you sure?” a Salomon banker blurts out. “Is that illegal?”
In Tokyo, Mitsuo Hishida smiles awkwardly and glances at his attorney when the question of Yokoi’s secret payment to Grace is raised. “How did you get that?” Hishida asks when shown a copy of the payment schedule. Told it was included in court papers, he smiles again and strokes his chin. “The lawsuit? This is open to the public?” Another glance at the attorney. “In Japan, we cannot get this at court. In the U.S., this is public?”
After a long, whispered aside, the lawyer weighs in. “Certainly, the payment was made in ’91,” he intones. “So, yes, on Yokoi’s side, our understanding was we acquired this in 1991.”
Officially, Oliver Grace owned the Empire State Building until he sold it to a Yokoi shell company in May 1993, presumably waiting 18 months to further the impression that he was an independent buyer. No announcement of the second sale was made, either in Tokyo or in New York. Peter Malkin’s people at the building weren’t even told it had been resold.
Soon after, when Yokoi began bragging of the purchase to his creditors, rumors of his boasts reached a Japanese magazine reporter, Akihiko Nakanishi. Nakanishi broke news of the acquisition that summer, but the article went unnoticed outside Tokyo. In fact, neither Yokoi’s nor Kiiko’s name surfaced in the U.S. press until July 1994, when Donald Trump announced he had acquired a 50 percent stake in the Empire State Building from a group of “wealthy Asian and European investors.” Under the vague terms of the deal, Trump boasted with typical fanfare, he hadn’t paid a penny. “I intend,” he concluded, “to make my position worth a fortune.”
Trump says his involvement with the Yokois began innocently enough, via an unsolicited phone call from Renoir in early 1993. He had heard rumors about Renoir’s involvement in the Empire State Building sale and, after having him checked out, agreed to meet with him. But Renoir wanted to discuss the idea of Trump investing with Yokoi in Tokyo, where the Hotel New Japan stood empty, not New York. Yokoi’s creditors were on the verge of seizing the hotel, and he was increasingly desperate to develop the site.
“He told me, ‘We have the Trump Tower site of Tokyo,’ just a fabulous site, and explained the situation,” Trump recalls. “So I said, ‘Well, you have a closed hotel that’s going to be destroyed, $1.8 billion in debt, so I have to pay $600 million just for the land. I guess it better be a great site.’ “
What Trump saw at first glance he liked — so much so that, in a May 1993 letter to Yokoi, he proposed building what he dubbed “Trump Tower Tokyo,” a “deluxe building of over 30 stories” on the Hotel New Japan site. The new building’s board, Trump wrote, would consist of Yokoi as chairman, Trump as C.E.O., and Kiiko as executive vice president. In return, Trump would help renegotiate Yokoi’s debt. “If you agree,” Trump wrote, “we can proceed with the project immediately.”
But, as Trump tells the story, all was not as it seemed. “Let me tell you, I had no interest in the Hotel New Japan,” he tells me. “After I studied it for nine seconds, I realized it was going to be a tough deal. I kept talking about the Empire State Building. Coming from Queens, owning the Empire State Building is kind of cool.”
His idea, Trump says now, was to befriend Yokoi with talk of a Hotel New Japan rescue package, then use his newfound leverage to forge a deal for the Empire State Building. With that in mind, he and his wife, Marla, flew to Tokyo that August, where Yokoi put them up at the Imperial Hotel. Alerted by Renoir, who acted as Trump’s unofficial press agent, Japanese newspapers speculated eagerly about what Trump wanted in Tokyo, and assigned photographers to trail him through the streets. But, for all the speculation, no one figured out he had come to see one man, Hideki Yokoi.
When the two finally met, as Trump tells it, it was love at first sight. “I got along with this man so incredibly well, it was like a bonding, and we didn’t even speak the same language,” says Trump. “He was just this perfect little man. Perfect face. Perfect haircut. The perfect shirt, the perfect blue pin-striped suit. I mean, a perfect picture of an elderly man.”
In his attorney’s office in Tokyo, Hishida likewise has fond memories of the Trump visit. He pulls out several red photo albums packed with pictures of the small dinner party Yokoi held for Trump. “Trump-san! Here! Trump-san!” he says, pointing excitedly. Here are Donald and Marla toasting Yokoi. Donald standing with his arm wrapped around Yokoi, who is wearing a small green bow tie. Donald leaning low, smiling tentatively, and clasping Kiiko.
Trump, who during our interview repeatedly calls his would-be partner “Mr. Nikkoi,” feels Yokoi has gotten a bum rap in Japan. “This is not a bad human being, this Mr. Nikkoi,” he says. “I found him to be a fascinating and a very nice man. [After the fire] he did not commit hara-kiri, he did not accept blame. For that they hate him. [People] think, He’s in jail, therefore Mr. Nikkoi is a Japanese mobster. He’s not. He’s a real-estate guy, very respected.”
When Trump met with Yokoi’s creditors, however, he found they didn’t share his opinion. As Trump tells it, he used the creditors’ animosity as an excuse to derail any immediate deal for the Hotel New Japan. “I saw immediately that there was such incredible hatred for Yokoi [among the creditors] that we wouldn’t ever get a deal,” he says. “Yokoi’s people were saying, ‘They’ll never foreclose, not on a Japanese citizen.’ [I said], ‘Well, I just left a creditor, and they have one thing in mind, to destroy this guy.'” At that point, Trump says, he changed his tune. “I said, ‘Look, the bottom line is I’m only moderately interested in the Hotel New Japan. I’m interested in the Empire State Building. I can’t go any further on this deal without an understanding on the Empire State Building.'”
“Tell Mr. Trump not to go too deeply into business with Kiiko. His reputation will be worse…”
Trump left Tokyo without a deal. But he kept in touch via Kiiko about the Empire State Building. Then, even as talks on Trump Tower Tokyo continued that fall, the unthinkable happened. On November 26 a Japanese high court, finally ruling on Yokoi’s appeal, ordered him to serve three years in prison. Upon hearing the news, Yokoi, who suffers from high blood pressure, collapsed and was rushed to the hospital. He remained there until doctors cleared him to begin serving his sentence in May 1994.
By that time, it appears, a serious communications gap had arisen between Kiiko and her father’s aides. “Just before Yokoi-san was sent to prison, he was in St. Luke’s Hospital in Tokyo, and I was at his bedside,” says Hishida. “So was Kiiko. On that occasion, Yokoi said to Kiiko, as to the overseas properties, talk to Hishida and get instructions from him. I was there. I heard the words. However, the day after Yokoi was sent to prison, Kiiko left Japan. She flew off. Since then I’ve been trying to get in touch with her, and she never replies!”
At this point, with Yokoi moldering in the drab Hachioji Medical Prison and Kiiko and Renoir secluded at their Juniper Hill estate, something went terribly wrong. On July 7, The Wall Street Journal carried news that Trump had acquired a half-interest in the Empire State Building; in a subsequent article it identified the building’s owners for the first time as Renoir and Kiiko — not Yokoi. In Tokyo, Hishida took a call from a friend in the Bank of Japan’s New York office, who sent him the article. Hishida says he was astonished.
“We never knew! We knew nothing!” Hishida tells me in machine-gun Japanese, gesturing excitedly. “I have asked Yokoi-san many times, and he confirmed that he never gave instructions to do this with Trump. Never! Nothing!” But if the Trump deal stunned Yokoi, news that Renoir and Kiiko were the skyscraper’s legal owners apparently sent him over the edge. As his American attorney, Steven Rosen, acknowledges, “Yokoi went nuts.”
Had the Empire State Building been stolen — again? The tangled roots of the dispute appear to date to the family’s official purchase of the skyscraper in 1993. The building was actually acquired by an American trust that, via a series of Netherlands Antilles shell companies, was controlled by a trust on the Isle of Man. But apparently unbeknownst to Yokoi, who has never visited the U.S., he wasn’t listed as the principal beneficiary of the Isle of Man trust. Kiiko, whose New York attorneys drew up the papers, was. “It was [Yokoi] that sent the money, and naturally Yokoi believed the [building] was registered under his name,” says Hishida. “Since we began using her as an agent, we have often asked Kiiko to send us a financial [ownership] statement, but she never did.”
Kiiko and Renoir, through their attorneys, strongly deny they stole the Empire State Building or anything else. “It is not fathomable that [Kiiko], someone who is not financially sophisticated, would attempt to steal the Empire State Building,” Kiiko’s attorney Henry Bubel says dryly. Kiiko, who insists all her actions were authorized by her father, has a simple explanation for how she came to own the world’s most famous skyscraper. As Trump puts it, “It was a gift.”
Rather than confront Kiiko, Yokoi brought in Steven Rosen, who in turn hired the vaunted detective firm of Kroll Associates to investigate Kiiko and Renoir. Together they unearthed corporate records that showed the pair not only controlled the Empire State Building but had taken title to several of the European castles as well. Apparently without giving any indication of their mounting alarm, Hishida telephoned Kiiko and requested a copy of the deal with Trump. He never got one.
The inevitable showdown between father and daughter, such as it was, didn’t take place until October 1994, when Bubel visited Tokyo. At an October 19 meeting, Hishida politely asked for a copy of Kiiko’s agreement with Trump; Bubel said he would phone Kiiko for permission to mail him one. The atmosphere grew tense the next day when, after an unrelated discussion, Hishida again asked for a copy of Kiiko’s deal. “As soon as [some others] left the room, they turned the discussion back to the Empire State Building, and I said, ‘Well, I thought we discussed that [yesterday],’ ” says Bubel. “There was an independent banker in the room who had no reason to know what was going on. I didn’t feel it was proper to be having discussions about the Empire State Building in front of the banker. I said, ‘I think we’re being rude. We should continue this at another time.’ There was no chance to do that. I left Tokyo the next day.”
Yokoi’s people depict Bubel as even more evasive. “Bubel got very stiff,” says Steven Rosen, “and said something like ‘There’s no further purpose to this meeting.’ Yokoi’s people felt put off. [But] they knew now they were not the [owners]. They knew Bubel was not acting for them.”
Ten days later Yokoi sued, leaving no one more flabbergasted than Trump. Yokoi’s suit directly challenges the validity of his deal with Kiiko. Both Yokoi and the Helmsleys, in fact, say Trump almost certainly doesn’t own half the building. Rather, he probably owns an interest in the financial “upside” he can create by ousting the Helmsleys from their lease — which would explain how he bought a stake, as he put it, without paying a penny. “I’d rather not comment on that,” Trump tells me. “But the ultimate answer is that I own 50 percent of the building. It’s a complicated formula. A case could be made I actually own 50 percent. It’s just a very complicated formula.”
Trump insists he is puzzled by Yokoi’s suit. “My impression, strongly, was that [Kiiko] owned the building, that it was a gift from the father,” he says. “Forty million, to Yokoi, it’s like giving her a trinket. He bought this like you’d buy a bracelet for your wife.” Even if he didn’t, Trump says, the notion that Yokoi remained ignorant of months of talks between Kiiko and the Trump Organization is inconceivable. Says Trump, “He must have known.”
If so, why would Yokoi be suing?
Maybe, Trump speculates, advancing a theory favored by Kiiko’s attorneys, Yokoi’s other children grew jealous when they discovered in the newspapers that their father had given Kiiko such an expensive gift. “All of a sudden the brothers and sisters read that Kiiko owns the Empire State Building,” Trump suggests, “and they go rat shit.” Maybe her brothers, Trump goes on, who help run the company in Yokoi’s absence, sued without his knowledge.
“When I saw him, he was 81, and he looked good, but he was a legitimate 81,” says Trump. “But now, don’t forget, time has passed, and tough time, in a jail, not in one of his villas. I would imagine he’s not in great shape, both mentally and physically.”
“No!” Hishida fairly shouts when I raise this theory. “Yokoi-san has been very distressed, saying his own daughter betrayed him! You can imagine how upset he is.” Twice, Hishida volunteers, Kiiko has tried to visit her father in prison; both times he refused to see her. (Kiiko says she never tried.) Three years ago Yokoi formally recognized Kiiko as his daughter. “Now,” says Hishida, “he wants to cancel it.”
Steven Rosen, who first visited Yokoi in prison in January, says his client knows exactly what he’s doing. “He spoke vigorously,” says Rosen, who talked with Yokoi through holes in a Plexiglas window as a guard looked on, taking notes. “He believes Kiiko has done something criminal. He wants criminal charges pressed.”
To avert that, and to clear the primary obstacle to Trump’s assault on the Helmsleys, settlement talks among attorneys for Yokoi, Kiiko, and Trump began in February. Bubel, claiming Kiiko’s actions were all authorized by her father, insists Yokoi is a beneficiary of the Isle of Man trust. But Rosen says Yokoi is at best “a discretionary beneficiary,” capable of receiving income only if Kiiko allows. “We’re still trying to get to the bottom of this,” Rosen told me in mid-March.
No matter what happens, the case carries real risk for Trump. While he has little or no money on the line, the Helmsleys will argue that he is doing business with a purported crime figure — which could jeopardize Trump’s all-important New Jersey casino licenses.
But as lawyers for Trump and the Helmsleys gird for battle and tabloid reporters crawl through the Empire State Building interviewing tenants, 7,000 miles away in a Japanese prison only one thing matters to Hideki Yokoi. “All we want is our building back,” says Hishida. “What’s best for Kiiko is she has to be courageous enough to come and speak to her father. Yokoi says if she comes back and says, ‘Everything is back to you, Father,’ he can rethink their relationship. But first she has to put everything back to the way it was before.”
He pauses. “You know Mr. Trump, yes? Give him some advice. Tell him not to go too deeply into business with Kiiko. His reputation will be worse than her father’s when she gets through with him.”